A tense climate for Trump

A tense climate for Trump

Nicolò Sartori
Washington's announced U-turn on the Paris Climate Agreement - in addition to having compacted the deployment of the global powers ready to confirm their commitments against climate change – is likely to place the U.S. renewables industry in a crisis compared to the ever-advancing power of Beijing

The United States, as announced by Donald Trump during his election campaign for last year’s presidential elections, will commence the procedure for exiting the Paris Climate Agreement. The tycoon’s announcement, which came after the G7 summit held in Taormina on May 26 and 27, triggered chain reactions, fueling the discomfort and indignation of an international community that is increasingly concerned about the sustainability of the planet. However, with the cards on the table, Washington’s possible exit could have less dramatic effects than expected and, above all, more negative implications for the United States than for the future of the world’s climate.

Donald takes on the majors

The fact that Trump decided to enter the climate agreement, having bitten off more than he could chew, was definitely understood at the G7 summit in Taormina, during which the tension between the majors rose, clearly expressed by Angela Merkel’s dissatisfaction and a final statement that leaves no room for interpretation. Six on the one hand, America on the other. After last Thursday’s announcement, which officially sanctioned the United States’ farewell to the mechanisms of international cooperation against climate change, this strategy has been repeated with even greater force. Above all, the rise of shields of the France-Germany-Italy trio which, with a timely joint statement, reaffirmed their commitment to the Paris Agreement, reinforcing the dialogue between the three countries. The trilateral communication also contains a clear reference to the opportunities for growth and economic prosperity induced by the fight against climate change, a theme that contradicts Trump’s reactionary vision, which has repeatedly presented global decarbonization policies to the American public opinion as an unnecessary and unjustified cost for the U.S.

It's economy, stupid!

However, with regard to the economic and industrial implications of climate change, the position of the new American administration does not hold water. The decision to weaken the role of the EPA – placing it under the direction of a climate change negotiation leader such as Scott Pruitt, and deciding to put a definitive end to the Clean Power Plan, the energy transition plan prepared by the Obama presidency as a contribution to COP21 in Paris, go hand in hand with Trump’s promises to bring the American coal industry back to life. It does not matter much if, at present, the industry is in constant decline in terms of turnover, and employs just over 50,000 people, also as a result of the growth of natural gas in the generation of electricity. Irrelevant figures, compared with the boom underway in the renewables industry: in 2016, the number of green jobs in the United States grew by seventeen times compared with the national economy average, reaching a peak of 806,000 employees. Over the last three years, the growth in solar power workers alone (117,000 new jobs) more than doubled the staff currently employed in America’s coal mines. In light of these figures, it is no surprise that the U.S. industrial world - especially those segments relating to high-tech excellence which, in recent decades, have guaranteed the country’s global leadership - has reacted hard to Trump’s announcement, reaffirming its commitment to decarbonization as a countertrend to the decisions of the White House. The fight against climate change, from a pragmatic and utilitarian perspective, is a great business opportunity, which U.S. companies certainly have no intention of giving up on.

New global alliances

However, the stakes for the development of the American industrial fabric and for its competitiveness at a global level are actually high. Green Chinese companies are certainly not watching and are ready to take advantage of Washington’s retraction to intensify their aggressive policy on investment and technological and industrial penetration on an international level. In 2016 alone, China invested $32 billion in renewable energies abroad, in both industrialized countries such as Germany and Australia, and in emerging economies such as Brazil, Chile, Indonesia, Egypt, Pakistan and Vietnam. In the absence of a propulsive role of the White House, American industry may face increasing difficulty against the pressure of Chinese competitors. Following Trump’s decision, the Beijing government seized the moment to make a decisive decision as the global champion of decarbonization. The convergence between China and the European Union in the fight against climate change is significant being sanctioned - by fate - at the same time as the announcement of Washington’s exit from the Paris Agreement, during the EU-China Business Summit. The reference to the rules and international cooperation mechanisms marks Beijing’s awareness of its responsibilities and its global role. The United States, on the other hand, is entrenching itself in a backward position on one of the major global issues in the coming decades, underestimating both the economic and industrial implications, as well as the consequences on Washington’s geostrategic projection. In this context, China’s response to America’s isolation sounds almost like a handover.